Gold Technical analysis 17

The gold price is stabilizing today after suffering its biggest loss in 6 weeks yesterday on the back of strong retail sales numbers from the US

The figures hit the market at 0.5 percent against expectations for a number of 0.3 percent and once again raised speculation that the Fed may raise interest rates again this year.

It seems that some investors have a short memory and they forgot about the release of CPI numbers from the US last week, which came in well below consensus and are sitting well short of the US Federal Reserve’s target rate of 2 percent.

We believe the inflation numbers concern the Fed the most and this is why no further rate hikes are expected this year.

On the chart, we can see that gold found strong support over the last 2 days around the $1,270 mark and this should be the base to resume the current uptrend.

The Fed minutes released later today will be the catalyst for the drive higher and we do not expect too much optimism from the central bank today which is going to benefit gold.

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